A SOUTHPORT college’s £38m rebuild dream has been shattered after the Government’s funding programme ground to a halt because of the credit crunch.

King George V College was due to start constructing its new state-of-the-art buildings on Scarisbrick New Road this month.

But the Learning Skills Council (LSC) has frozen all college and further education building programmes for at least three months.

John Denham, Skills Secretary, has appointed Sir Andrew Foster to investigate the crisis of freezes on building sixth-form and further education colleges nationally.

Principal of the 1,600-student KGV College, Hilary Anslow, said: “This news of the funding freeze has come absolutely out of the blue.

“We’re just going to have to wait and see how long the freeze is going to be.

“We’re hoping it’s just a short delay and then we’ll be given the go-ahead, because we were meant to start building really soon.

“I’m trying to be optimistic about it all because it’s a fantastic building plan and all the students and local community are behind it.”

At present, around a third of lessons at the Kew site are taught in temporary accommodation.

Existing college buildings, which date back to the 1960s, are no longer deemed to be up to scratch.

The plans are to demolish the old buildings and replace them with modern facilities, including a sports hall, dance studio and fitness zone. The new sixth form college would still have 1,600 pupils, but designers hoped to give students more space with high tech facilities.

The Learning and Skills Council held emergency meetings last week with 22 colleges which were expecting to start rebuilding work this spring.

Dr David Collins, president of the Association of Colleges, said: “The LSC has encouraged colleges to do bigger builds than were intended.

“For some reason they seem to have lost track of the amount of money that was in the system.”

A spokesman for the Learning and Skills Council said that nearly 700 projects had been agreed at 330 colleges and only 42 colleges had not yet benefited from investment.

He said: “However, the pace of demand for funding has increased because the scale of ambition and the government funding they require has grown.”

Kew ward councillor Maureen Fearn said she was very sad to hear the college’s funding had stalled.

The Liberal Democrat said: “We had high hopes but we do realise at this time of the credit crunch that many offers of money are being frozen.

“I just hope that they can be released as soon as possible because we have great hopes for KGV.”